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Two sharply competing views laid out at Mike Duffy’s trial

Mike Duffy’s trial kicked off with explosive new details about alleged misuse of public funds, emphatic denials of guilt, and a dramatic claim.

Prime Minister Stephen Harper says he will not be asked to testify at Mike Duffy's fraud trial. The suspended senator was quiet as he left the courthouse on the first day of the trial, where he formally pleaded not guilty to 31 charges.(reporter: Terry Pedwell, Tamsyn Burgmann; producer: Kat McCallum)

OTTAWA—Suspended Senator Mike Duffy’s trial kicked off with explosive new details about alleged misuse of public funds, emphatic denials of guilt, and a dramatic claim that Prime Minister Stephen Harper and his top advisers were “good to go” with “extorting” Duffy to falsely admit mistakes when the political heat was on.

Two starkly different pictures emerged Tuesday in the crowded Ottawa courtroom through opening statements by the Crown and defence.

They outlined evidence to come in the seven-week trial that promises this will be a contest between what the Crown called a “common sense” view of the public trust versus the defence’s call for judicial restraint and deference to Senate rules. Duffy’s lawyer, Donald Bayne, said the judge’s duty is to heed only the letter of the law; even if “fuzzy” Senate rules allowed a Senate “administrative mess” to flourish, it is not the court’s job to clean it up.

Deputy Crown attorney Mark Holmes said Duffy billed the Senate $82,000 in “secondary residence” expenses though he did not live in Prince Edward Island and was just “commuting” from his Ottawa home. He said Duffy claimed travel payments for Senate business when he was attending family events including the birth of a grandson, his daughter’s theatre debut and at least 18 funerals of friends.

Duffy charged the Senate for what Holmes called a “shopping trip” to Peterborough to see MP Dean Del Mastro and to look for a puppy at a dog show — fraudulent billings that the Crown said amounted to “criminal” activity.

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The media surround Mike Duffy, bottom, and his defence lawyer Donald Bayne, top, as they arrive outside the courthouse in Ottawa on Tuesday. (Sean Kilpatrick / THE CANADIAN PRESS)

Holmes painted Duffy as an “equal partner if not the instigator” of the infamous scheme that saw Harper’s former chief of staff, Nigel Wright, write a $90,000 cheque to cover Duffy’s contested expenses.

But Duffy’s defence team shot back with a stunner of its own.

Lawyer Donald Bayne said Harper named Duffy — a nationally known broadcaster — to the Senate in 2008 and used him for political advantage to sell the Conservative government’s message and budgets. When a media storm struck in December 2012 over Duffy’s living expenses, Bayne said, the PMO and top Senate leaders turned on him.

Bayne revealed for the first time details of an interview between Nigel Wright and the RCMP in the summer of 2013, which Bayne suggested explains the infamous “good to go” line — from a Wright email after he met with Harper on Feb. 22 to go over plans to have Duffy repay.

Reading out Wright’s words, Bayne said Wright acknowledges the prime minister approved a plan to threaten Duffy to repay expenses he didn’t owe.

“I told the prime minister that, uh, Duffy was going to pay, he was basically going to say it was a mistake . . . and that the government people would have lines consistent with that, uh, and I also told the prime minister that he (Duffy) had sort of decent technical or legal defences to this crime. I was aware of the fact that I was pushing very hard to have a caucus member pay a significant amount of money to which he may have been legally entitled,” Bayne quoted Wright as telling the RCMP. A full transcript has not been released publicly.

“What a threat,” said Bayne. He characterized it as an admission that “we were basically forcing, Mr. Prime Minister, someone to repay money that they probably didn’t owe.”

“The prime minister, knowing all of this, gave the go-ahead to this course of action with Senator Duffy, all of which was for the pure political advantage of the government,” said Bayne. “It was appearance, not reality or truth that mattered.”

“Seldom has an extorted person been called an equal partner,” Bayne told Judge Charles Vaillancourt.

The Crown outlined four sets of charges related to Duffy’s housing claims, travel claims, contracts, and the $90,000 repayment.

Holmes said the prosecution case over inappropriate living expenses is a matter of “common sense” and not a question of Duffy’s “constitutional eligibility” for a P.E.I. Senate seat. Having lived in Ottawa for the 36 years prior to his 2008 appointment, Duffy was “probably ineligible” for the P.E.I. appointment and would have “perhaps” been eligible for an Ontario seat, said Holmes.

Yet Holmes told the judge to set aside the larger constitutional issue to focus on the “dishonest and corrupt” actions of a senator who had an Ontario driver’s licence, health card, and had filed income taxes as an Ontario resident for three decades. He didn’t file as a P.E.I. resident until April 2014, said Holmes.

Holmes detailed several questionable travel claims, saying Duffy billed the Senate for a trip to British Columbia in December 2010, where Duffy visited his daughter shortly after she gave birth.

“There’s nothing at all wrong with that, except for the fact that he then billed it back to the Senate,” Holmes said in court.

The diary of Duffy submitted as evidence shows on Dec. 9, 2010, Duffy’s daughter, Miranda, gave birth to his grandson. That same afternoon, Duffy and his wife, Heather, flew to Vancouver, visiting them in hospital the next day. The calendar also says the trip was for Duffy to attend a fundraiser for Cockrell House, for homeless veterans, in Victoria, B.C. on Dec. 10. Other records submitted to the court show Duffy billed the trip to the Senate, labelling it “Senate business — speaking engagement and meetings”.

Bayne said expenses for such “family reunions” when combined with parliamentary business are allowable and encouraged under Senate rules, for the health and well-being of senators, even if events are cancelled at the last minute.

Bayne said partisan business is also Senate business, and Duffy “travelled extensively at the behest of the Conservative prime minister and the Conservative caucus.”

He said Duffy never bought a dog on the Peterborough trip, and said he was surprised the Crown was “mischaracterizing” evidence to come.

Mike Duffy said little as he made his way into court Tuesday morning.(Toronto Star)

Holmes also referred to supplier contracts paid out of Duffy’s annual Senate office budget that the prosecution alleges were payments to acquaintances of Duffy’s that were otherwise ineligible. The Crown submitted documents to show Duffy paid a makeup artist a cheque for $300 through Maple Ridge Media Inc., a company run by Duffy’s old CTV friend Gerald Donohue.

The invoice from Jacqueline Lambert says she provided makeup services for an official photo shoot on March 5, 2009. A letter from the Senate administration to Duffy, dated Apr. 9, 2009, says the invoice would not be processed because makeup service “is not an expenditure that is allowed” by Senate guidelines.

However Bayne replied it was a valid expenditure within Duffy’s purview to pay, given Duffy’s makeup artist had also made up Prime Minister Stephen Harper when the two appeared together at a G8 conference.

Duffy stood mostly silent all day, but said in a loud clear voice “I am not guilty, your Honour” after a clerk took about 15 minutes to read out the 31 charges of fraud over and under $5,000, breach of trust, bribery and fraud on the government.

Before it all began, Bayne requested Duffy’s wife, Heather, a nurse, be allowed to remain in the courtroom for support and “in case of any emergencies.”

None of the evidence has yet been introduced or tested, the judge cautioned the public.

At an event in North Vancouver, Prime Minister Stephen Harper said Tuesday he wouldn’t be testifying at the Duffy trial and wasn’t worried about what PMO staffers might say in their testimony about his knowledge of the $90,000 cheque written for Duffy by Wright.

“The answer, of course, is no,” he responded when asked Tuesday about those possibilities. Referring to the RCMP probe of the circumstances around the $90,000 payment to Duffy, Harper said, “As you know, investigators looked at this and affirmed what I said: I have no knowledge of these things. I will not be called as a witness.

“We will continue to provide all possible assistance to the Crown with respect to the Duffy trial,” Harper said. “This is a case that’s currently before the courts and thus I have no intention of commenting further on it.”

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